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Elaborated SWOT Analysis of AutoZone – The Largest Retailer Of Auto Parts & Accessories In The United States

Updated on: Dec 13, 2021
SWOT Analysis of AutoZone - Featured Image

Are you looking for the SWOT analysis of AutoZone? In this blog, we will do a detailed SWOT Analysis of Autozone. But before starting you might like to read about the importance of digital marketing in the automotive industry.

AutoZone is a US-based Auto parts company and has headquarters in Memphis, Tennessee, in the US which has been committed to providing the best parts at the best prices and good customer service in the automotive aftermarket industry. Also, AutoZone is the largest retailer of auto parts and accessories in the United States

One of the reasons for the success of AutoZone business is its digital marketing strategies. AutoZone’s central focus has been digital marketing since the beginning of digital marketing popularity. However, if you feel the urge to grasp more knowledge about digital marketing. Give a shot to our Free Masterclass on Digital Marketing especially prepared and brought to the table for beginners by our CEO Karan Shah.

This blog has been written to gain a thorough understanding of AutoZone company, products, popularity, net revenue, and to give an authentic picture of the SWOT analysis of AutoZone.

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About AutoZone

SWOT Analysis of AutoZone - AutoZone Store

AutoZone, which first opened in Forrest City, Arkansas on July 4th 1979 was earlier called Auto Shack and was a division with a larger company called Malone & Hyde. AutoZone growth came quickly when the company opened its 100th store in Velasco, Texas. 

Just 4 years later it was spun off from Malone & Hyde in 1986 that same year it debuted the first products of its in-house O’Reilly Duralast brand under which it markets a variety of items including starters, Alternators, Batteries & Handtools. The following year AutoShak changed its name to AutoZone.

AutoZone has a consistent history of going the extra mile for its loyal customers and their community. AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories this makes AutoZone in the top 10 auto parts retailers.

 

Quick Stats on AutoZone
Founder Pitt Hyde
Year Founded 1979
Origin Forrest City, Arkansas, U.S.
No. of Employees 87,000+
Company Type Public
Market Cap $ 41.99 Billion (2021)
Annual Revenue $ 12.631 Billion (2020)
Net Income/ Profit $ 1.732 Billion (2020)

 

SWOT Analysis of AutoZone - AutoZone Services & Products

 

Products & Services by AutoZone

  • Auto Parts
  • Interior Accessories
  • Exterior Accessories
  • Advice
  • Truck Parts
  • Tools
  • Chemicals 
  • Performance


Competitors of AutoZone

  • Transamerican Auto Parts
  • Pep Boys
  • O’Reilly Auto Parts
  • LKQ Corporation
  • Delphi Technologies

Now that we understand the company’s key business, let’s look after the SWOT Analysis of AutoZone.


SWOT Analysis of AutoZone

A SWOT analysis compares an organization’s strengths, weaknesses, opportunities, and threats against those of its competitors. It’s a fantastic tool for determining whether a company is prospering, failing, or expanding. So, let’s look at the SWOT analysis of AutoZone.

To better understand the SWOT analysis of AutoZone, refer to the infographic below:

SWOT Analysis of AutoZone - SWOT Infographics of AutoZone

Now first let’s begin with the strengths of the company from the SWOT analysis of AutoZone.

Strengths of AutoZone

  • Teamwork: The success behind AutoZone is their team, they have been consistent to complete their customer’s needs and in providing customer service because they have the best team with talented and skilful people. They have been loyal to their customers and for their company for more than 39 years because AutoZone put customers first. Hence, because of teamwork, AutoZone has its leading community.
  • Leading Retailer and Distributor: AutoZone is the leading retailer and a leading distributor of auto parts replacement parts in the U.S. AutoZone sells its products through AutoZone stores in 50 US Stores with more than 6000 stores in the U.S. plus the District of Columbia, Puerto Rico, Mexico and Brazil. 
  • Automotive Diagnostic Repair Software: Today we all know the Automobile industry is a leading industry in a world so the Auto Parts industry because every vehicle needs to be in maintenance so AutoZone also sells automotive diagnostic and repair software through ALLDATA, diagnostic and repair information through alldatadiy.com which maintains a mutual benefit to their customers and AutoZone proves to be customer friendly.

SWOT Analysis of AutoZone - AutoZone E-commerce Store
(AutoZone E-commerce Store)

  • Digital Marketing: AutoZone has developed a competitive e-commerce platform for their customers where they sell repair parts & accessories, non-automotive parts and automotive hard parts. The website is available & can be accessed free of cost & hence customers who prefer to order their auto parts online can do so. AutoZone also provides repair guides and ‘how to videos’ which gives valuable information on how some automotive systems function.

Bonus Tip: The web-based presence and e-commerce give AutoZone a significant upper hand. Not only AutoZone but you can also get the significant upper hand on your business by training yourself in several digital marketing skills which also include courses on how to create a website and how to build an e-commerce presence, this training will help you to develop your business just like what AutoZone have. Not only entrepreneurs but students can also get benefited from these courses because many international brands like AutoZone are looking for talented digital professionals who can work for them as a freelancer. So do check out for your benefit.   

  • Number of Stores: AutoZone is opening their stores at a tremendous rate. Autozone’s store development department explores hundreds of locations each year which completes the company’s accommodation and expansion needs which is a very important factor for the company’s growth
  • All Owned Stores: AutoZone does not offer franchises all stores are owned by the company. This is one of the biggest pillars of AutoZone because revenues are created from the 6000 plus stores in the US, Mexico & Brazil, which gives management the chance to build on the past success that has given AutoZone the ability to create expansion revenues.
  • Financial Wellness: Autozone continued strong financial performance that allowed their business to grow, return meaningful amounts of cash to their shareholders and maintain their investment-grade credit ratings and AutoZone is committed to maintaining a disciplined capital allocation policy to drive growth & increase shareholder returns while maintaining adequate liquidity.
  • In-store Service: The emphasis on in-store service has been especially important for AutoZone. About 80% of its revenue come from “Do It Yourselfers” i.e Home-mechanics. A ton of these clients can be gearheads and auto devotees, yet a significant number of them are essentially clients who would prefer to work somewhat on their vehicles to save the cost of an excursion to the specialist. 


Weaknesses of AutoZone

  • Workplace: A survey of representative fulfilment directed by investigators brought about AutoZone being an awful working environment in America. A major bad review that was highlighted during the survey is No Security. Employers should be satisfied because employers are important to run a company. If employers are not satisfied then in the long term it’s one of the major weaknesses for the company.
  • Load on Computer Systems: Auto Parts is a huge industry, In every month new vehicles are launched and there is an unlimited range available in auto parts store so it is humanly impossible to keep track of every item on computer systems which makes this one of the weaknesses of AutoZone.
  • Restricted Geographic Range: It is only present in America, with heavy dependence on the United States. 


Opportunities for AutoZone

  • New Vehicle Launch: Due to the increased range of cars launching every year the potential growth for the customization market has widened. The company must be updated with every launch and a range of correct accessories should be provided for newly launched vehicles.
  • International Expansion: AutoZone is only restricted to the U.S. As the auto parts market provides an opportunity for growth it is a great opportunity for AutoZone to increase their store expansion internationally. 
  • Effect of Covid Pandemic: During the pandemic social distancing was practised everywhere to maintain containment hence, public transport was prohibited like trains, buses, etc. And this led to increased use of private vehicles like cars by the public and therefore, increased benefits for companies.
  • Maintenance & Repair: If services like maintenance & repair will be provided at a faster rate then it will increase the life of the vehicle and mutual benefit will be developed between the customers and the company. It will also help the company to help through financial uncertainties.
  • Stocks: AutoZone stocks skyrocketed near $1,250 a share at the end of 2019. Investors see the company as a leader in a segment of the auto parts industry.


Threats to AutoZone

  • Monsoon Season: Sales are affected as a result manufacturing of products is reduced & sales are decreased due to the rainy season.
  • Launch of Electric Vehicles: Electric cars are known to be mechanically simpler than their internal combustion counterparts. The likely effect of this is mysterious.
  • Rivals: The aftermarket auto parts industry is a highly competitive market. AutoZone has some pretty capable rivals & there are massive changes taking place in transportation that threaten the entire automotive industry. Like its closest rivals O’Reilly Auto Parts, Advance Auto Parts & NAPA Auto Parts.
  • Veteran E-commerce Businesses: E-commerce also poses an oblique or indirect threat. Online business organizations, for example, Amazon remain a danger. If Amazon chooses to move into car parts, car parts merchants could experience the ill effects from online business rivals and different organizations.
  • The Burden of Debt: The debt increase affects the company’s ability to expand outside U.S territories and this is one of the biggest disadvantages for AutoZone.

This ends our elaborated SWOT analysis of AutoZone. Let us conclude our learning below.

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To Conclude

Today AutoZone has the most minimal proportion in the business and its development openings are speeding up. What we’ve found over the most recent few years is AutoZone has made many ventures and their development rate is currently re-speeding up.

However, threats are major challenges that AutoZone company is facing in the United States and other international markets that it operates in and the strength of AutoZone sustains a competitive advantage in the marketplace. The company has beaten its competition and the biggest reason for that is its amazing marketing efforts in highlighting the brand to its customers. 

Marketing is one of the main pillars of any business, and currently, this pillar is going through rapid change. With the increasing importance of digital marketing, learning about the growing field is an important step and IIDE, the digital school provides the best courses in digital marketing. If you have the curiosity to learn you may check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of AutoZone has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of AutoZone, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of AutoZone in the comments section below.

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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